U.S. grains: Corn up on strong exports, ethanol demand

Chicago | Reuters — U.S. corn futures touched a six-month high on Friday, buoyed by robust demand from exporters and ethanol producers, analysts said.

Wheat followed corn higher in largely technical trade while soybeans eased on profit-taking. But all three markets posted weekly gains.

Chicago Board of Trade March corn settled up 3-1/2 cents at $3.69-3/4 a bushel after reaching $3.70, its highest since mid-July (all figures US$). For the week, the contract rose 11-1/4 cents or 3.1 per cent.

Corn got a boost when the U.S. Department of Agriculture’s weekly export sales report put corn sales at nearly 1.4 million tonnes, topping a range of trade expectations.

USDA also said private exporters in the last day sold 126,312 tonnes of U.S. corn to unknown destinations.

The export figures came on the heels of government data released Thursday that showed U.S. production of corn-based ethanol reaching a record-high for the third straight week.

“We are seeing a support coming from yesterday’s ethanol report that shows that 12 consecutive weeks of production over one million barrels a week… (and) a very strong week of exports this week. There’s a decent demand in this market,” said Brian Hoops, analyst with Midwest Marketing Solutions.

Wheat followed corn higher, although weekly wheat export sales fell below trade expectations. Commodity funds hold a large net short position in CBOT wheat, leaving the market vulnerable to bouts of short-covering.

Soybean futures drifted lower on profit-taking and what appeared to be long liquidation after a rally this week to six-month highs.

However, for the week, CBOT March soybeans rose 21-1/4 cents or two per cent, buoyed by floods in Argentina that have raised concern about soy crop prospects. Traders continue to assess the extent of damage.

The Rosario grains exchange on Thursday cut its forecast for the 2016-17 Argentine soybean crop to 52.9 million tonnes from 54.4 million tonnes previously because of bad weather.

The Buenos Aires grains exchange, meanwhile, trimmed its soybean planting estimate by 100,000 hectares to 19.2 million hectares (47.4 million acres) and warned of the potential for further losses.

“The Buenos Aires grains exchange said more than half of that area could be lost, depending on how the weather pans out over the next few weeks,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“Affected regions are expected to dry down over the coming days.”

Reporting for Reuters by Julie Ingwersen and Renita D. Young; additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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